U.S Inflation Could Rise To 20% Warns Jeremy Siegel

Inflation in the U.S. could rise to highs of 20%. Those are sentiments echoed by Jeremy Siegel, Finance professor at the Wharton School of the University of Pennsylvania. According to the professor, the easy monetary policy stance spearheaded by the Federal Reserve will be the catalyst to accelerate the inflation spike.

Rising Inflation

The sentiments come hot on the heels of inflation jitters rattling the market the past week. Consumer Price Index data shows that products of items are rising significantly, fuelling concerns that the FED may be forced to act. Stocks came under pressure the past week as CPI data jumped a stronger than expected 4.2% year-over-years.

Amid the rising inflation, Siegel warns that investors will have little in the way of an alternative to equities and other traditional inflation hedges. As it stands, bonds and cash have little appeal, one of the reasons investors will have little in their way of an alternative to equities or other traditional inflation hedges.

FED chair Jerome Powell has already indicated that he will continue maintaining an easy policy stance even as inflation pressures continue to build. The FED officials have already reiterated that inflation will continue to surge in the coming months, given the pent-up demand for goods and services and supply constraints.

Oil Markets Stability

In the oil markets, stability is slowly creeping in, in the wake of the Colonial Pipeline incidence. Supply and demand fundamentals have remained relatively consistent as U.S. inventory were little changed the past week as production held steady at 11 million barrels per day.

OPEC is holding steady its demand forecast for 2021 even as a surge in coronavirus cases in India continues to arouse concerns. Demand concerns have been shrugged in recent weeks, with prices stabilizing above the $60 a barrel level. Oil prices at above $60 a barrel should continue to offer a good setup for E&P cash flows allowing for capital inflows in the second half of the year.

By reading our website you agree to the terms of our disclaimer, which are subject to change at any time. Owners and affiliates are not registered or licensed in any jurisdiction whatsoever to provide financial advice or anything of an advisory nature. Always do your own research and/or consult with an investment professional before investing. Low priced stocks are speculative and carry a high degree of risk, so only invest what you can afford to lose. By using our service you agree not to hold us, our editor’s, owners, or staff liable for any damages, financial or otherwise, that may occur due to any action you may take based on the information contained within our newsletters, website, twitter, Facebook or chat. We do not advise any reader to take any specific action. Our releases are for informational and educational purposes only. Never invest purely based on our articles. Gains mentioned on our website, twitter, Facebook, and on our website may be based on EOD or intraday data. We may be compensated for the production, release, and awareness of this article. We will disclose any and all compensation on the article page. This publication and its owner never hold positions in the securities mentioned in our articles. Our information may contain Forward-Looking Statements, which are not guaranteed to materialize due to a variety of factors. We do not guarantee the timeliness, accuracy, or completeness of the information on our site. The information in our disclaimers is subject to change at any time without notice. We are not held liable or responsible for the information in press releases issued by the companies discussed in these write-ups. Please do your own due diligence